Loncar, D. v. Curry, J. ( 2018 )

J-A13010-18
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DANIEL LONCAR, AN ADULT : IN THE SUPERIOR COURT OF
INDIVIDUAL : PENNSYLVANIA
:
:
v. :
:
:
JAMES CURRY, III AND PATTI :
CURRY, HUSBAND AND WIFE, : No. 1347 WDA 2017
MICHAEL MEYLAN AND MARGARET :
MEYLAN, HUSBAND AND WIFE, :
CAROL ANN BALESK, AN ADULT :
INDIVIDUAL, NANCY L. BENNETT, AN :
ADULT INDIVIDUAL, DAVID :
WHITSLAR, AN ADULT INDIVIDUAL, :
AND CROSS AND CROWN :
CHRISTIAN FELLOWSHIP, INC., A :
PENNSYLVANIA NON-PROFIT :
CORPORATION :
:
:
APPEAL OF: CROSS AND CROWN :
CHRISTIAN FELLOWSHIP, INC., A :
PENNSYLVANIA NON-PROFIT :
CORPORATION
Appeal from the Order Entered August 23, 2017
In the Court of Common Pleas of Crawford County Civil Division at No(s):
AD 2016-772
BEFORE: OLSON, J., DUBOW, J., and MUSMANNO, J.
MEMORANDUM BY OLSON, J.: FILED AUGUST 30, 2018
Appellant, Cross and Crown Christian Fellowship, Inc. (CCCF), a
Pennsylvania non-profit corporation, appeals from the order entered on
August 23, 2017, denying its petition to strike/open default judgment. We
affirm.
J-A13010-18
The trial court summarized the facts and procedural history of this case
as follows:
Daniel Loncar [(Loncar)] filed a complaint [against CCCF and
individual defendants,1 James Curry, III, Patty Curry, Michael
Meylan, Margaret Meylan, Carol Ann Balesk, Nancy L. Bennett,
and David Whitslar] seeking [their] ejectment [] from [a] sixty
(60) acre property [where the individual defendants lived in
mobile homes] in Bloomfield Township, Crawford County[,
Pennsylvania]. CCCF and the individually named defendants were
served with notice of the complaint in ejectment on December 13,
2016. [Loncar] is the record owner of the property by means of
a deed dated August 28, 2001, and recorded in the Crawford
County Recorder’s Office on September 5, 2001, and found at
Deed Book 536, page 407, a copy of which was attached to
[Loncar’s] complaint and marked as Exhibit A.
Also attached to the complaint was Exhibit B, [copies] of letters
dated October 5, 2016, addressed to the individual defendants,
advising them to remove their mobile homes from the property
within a reasonable time, and notifying the defendants of
[Loncar’s] intention to file a legal action in the event that the
homes were not removed from the property. At no time after
[Loncar’s] October 5, 2016 letters was [Loncar] or [Loncar’s
counsel] contacted directly by [CCCF or the individual defendants]
in an effort to resolve the matter.
On the date of default, January 4, 2017, [Loncar] filed a ten[-]day
notice of default judgment. The ten (10) day period fell on
Saturday, January 14, 2017, which was followed by a court
holiday on Monday, January 16, 2017, making Tuesday, January
17, 2017, the first day that default judgment was available to
[Loncar].
On Friday, January 13, 2017, [Loncar’s c]ounsel received a
telephone call from an associate attorney who explained that his
firm had not yet been retained by CCCF but called to request an
extension of time to file a response to [Loncar’s] complaint.
[Loncar’s] counsel informed the associate that he would not grant
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1 The individually named defendants are not parties in the instant appeal.
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an extension to an attorney that was not formally retained in the
case and would not grant an extension without the consent of his
client. It was clear at the conclusion of the conversation that no
extension would be granted.
On January 17, 2017, at 8:35 a.m., [Loncar] executed default
judgment against [CCCF and the individual defendants]. On that
same day, counsel for the defendants filed a praecipe for entry of
appearance, but failed to file a responsive pleading.
On February 10, 2017, twenty four days (24) days after default
judgment was entered, CCCF filed [a] petition to open/strike a
default judgment[.] [Loncar] filed a response on February 27,
2017.
The parties [appeared] before the [trial] court for an evidentiary
hearing and argument on March 23, 2017 and April 25, 2017. The
parties were provided with thirty days to file findings of fact[, were
subsequently granted an extension, and ultimately filed timely
findings of fact. On August 23, 2017, the trial court denied CCCF
relief].
Trial Court Opinion, 8/23/2017, at 1-2 (superfluous capitalization omitted).
This timely appeal resulted.2
On appeal, CCCF presents the following issues for our review:
I. Is the principle of law espoused in the case of Gee v.
Caffarella, 446 A.2d 956 (Pa. Super. 1982) – that a
defendant in a trespass action can avoid default judgment
merely by filing an entry of appearance – still good law and
applicable under the circumstances of this case to justify
striking off the entry of the default judgment?
____________________________________________
2 CCCF filed a notice of appeal on September 20, 2017. On September 21,
2017, the trial court ordered CCCF to file a concise statement of errors
complained of on appeal pursuant to Pa.R.A.P. 1925(b). CCCF complied
timely. On November 14, 2017, the trial court issued an opinion pursuant to
Pa.R.A.P. 1925(a).
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II. Did the lower court abuse its discretion by not opening the
default judgment where (1) there was no real dispute that
[CCCF] had promptly filed its petition and [] raised a
meritorious defense, and (2) under the circumstances, there
was a reasonable basis shown as to why [CCCF] failed to
appear or answer?
CCCF’s Brief at 5 (suggested answers omitted).
In its first issue presented, CCCF contends that the mere filing of an
entry of appearance within the ten-day notice period governing default
judgment was sufficient to avoid the entry of default judgment in this case.
Id. at 24. For this proposition, CCCF relies upon our Court’s decision in Gee
v. Caffarella, 446 A.2d 956 (Pa. Super. 1982) (en banc) and argues the trial
court’s conclusion that Gee is “no longer good law” was erroneous
“considering neither an en banc panel of this Court nor our Supreme Court
ever overturned Gee.” Id. CCCF also challenges the trial court’s
determination that an answer to the complaint is required and mere entry of
appearance is not sufficient to avoid default judgment. Id. at 25. Further,
CCCF argues that it filed an entry of appearance within ten days of receiving
notice that default judgment would be entered. Id. at 29-30. CCCF maintains
that, “the tenth day necessarily must culminate at the close of business” and,
therefore, the “default judgment may not stand” because Loncar filed the
default judgment on the same day but before counsel for CCCF filed their
notice of appearance. Id. at 30.
We have previously determined:
Our standard of review regarding a petition to strike default
judgment is well settled. [When interpreting] the applicability of
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a Pennsylvania Rule of Civil Procedure[, we are presented] with a
question of law, our standard of review is de novo and our scope
of review is plenary.
A petition to strike a judgment operates as a demurrer to the
record, and must be granted whenever some fatal defect appears
on the face of the record. When deciding if there are fatal defects
on the face of the record for the purposes of a petition to strike a
judgment, a court may only look at what was in the record when
the judgment was entered. Importantly, a petition to strike is not
a chance to review the merits of the allegations of a complaint.
Rather, a petition to strike is aimed at defects that affect the
validity of the judgment and that entitle the petitioner, as a matter
of law, to relief. Importantly, a petition to strike does not involve
the discretion of the trial court.
Oswald v. WB Public Square Associates, LLC, 80 A.3d 790, 793–794 (Pa.
Super. 2013).
Relevant to this appeal, in Gee v. Caffarella, 446 A.2d 956 (Pa. Super.
1982), our Court determined:
Appellant/plaintiff/Grace Gee commenced an action in trespass to
recover damages for injuries sustained in an automobile accident
which occurred on February 5, 1979. According to appellant's
complaint, filed February 2, 1981, appellant was a passenger, at
the time of the accident, of an ambulance owned and operated by
appellee/defendant/Ambulance Corp. of America. Appellee was
not served with a copy of the complaint until April 15, 1981. On
May 22, 1981, at 1:17 p. m., an entry of appearance was filed on
behalf of appellee. That same day, at 1:54 p. m., appellant filed a
praecipe for the entry of a default judgment against appellee, for
appellee's failure to file an answer or entry of appearance. Default
judgment was then entered by the Prothonotary.
Under Pennsylvania procedure, a defendant in a trespass action
can avoid a default judgment merely by filing an entry of
appearance. Willinger v. Mercy Catholic Medical Center of
Southeastern Pennsylvania, Fitzgerald Mercy Div., 362 A.2d
280 (Pa. Super. 1976), affirmed, 482 Pa. 441, 393 A.2d 1188
(1978). In the instant case, the record clearly demonstrates that
the entry of appearance was filed with the prothonotary prior to
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the default judgment. Therefore, the default judgment was
improperly entered.
Gee, 446 A.2d at 957.
In light of intervening changes to the Pennsylvania Rules of Civil
Procedure, Gee no longer represents good law. As set forth above, Gee cited
to Willinger that, in turn, interpreted Pa.R.C.P. 1045. Rule 1045, however,
was rescinded effective July 1, 1984.3 Pennsylvania Rule of Civil Procedure
1018.1 covers the same subject and remains in effect. Rule 1018.1 requires
a notice to defend be appended to a civil complaint and directs a defendant to
“take action within twenty (20) days after [the] complaint and notice are
served, by entering a written appearance personally or by attorney and filing
in writing with the court [] defenses or objections to the claims[.]” Pa.R.C.P.
1018.1(b) (emphasis added). Rule 1018.1(b) further warns that a failure to
do so allows that case to proceed and the trial court may enter judgment
without further notice. Id. The comment further recognizes that
“Rule 1018.1 is universal, applying without distinction to all types of cause of
action and to all parties defendant.” Pa.R.C.P. 1018.1, Comment. As such,
Rule 1018.1(b) requires objections or defenses to the complaint and, in this
case, there is no dispute that CCCF did not file any. Under Pa.R.C.P. 1018.1,
entry of appearance is not enough to forestall default judgment.
Moreover, the trial court recognized that “the default judgment was
entered before [c]ounsel for [CCCF] entered his appearance.” Trial Court
____________________________________________
3 CCCF concedes this point. See CCCF’s Brief at 27.
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Opinion, 8/23/2017, at 4 n.1. Here, unlike Gee where “the record clearly
demonstrate[d] that the entry of appearance was filed with the prothonotary
prior to the default judgment[,]” the converse is true in this instance. The
record in this case confirms that counsel for CCCF entered his appearance
after the default judgment had been entered. Moreover, in determining if
there were fatal defects warranting striking the default judgment, the trial
court could only look at what was in the record when the judgment was
entered. As such, we discern no error in determining that default judgment
was properly entered and CCF’s petition to strike the judgment lacked merit.
Thus, we turn now to determine whether there was justification to open the
default judgment.
In its second issue presented, CCCF argues alternatively that the trial
court erred by declining to open the default judgment because it was
reasonable for CCCF’s delay in responding to Loncar’s complaint. CCCF’s Brief
at 30-37. CCCF “candidly admit[s] that there was no case law, consistent with
its position, that it is excusable for a litigant to conserve scarce resources in
lieu of defending a suit.” Id. at 33. However, it argues that the lower court
did not consider a 2001 agreement with Loncar, that “explicitly provided that
‘Loncar agree[d] that legal title and deed to the [p]roperty [would] remain
with [CCCF.]’” Id. at 34. In sum, because CCCF was dedicated to paying the
upkeep of the property and is a non-profit religious group, it suggests that the
trial court erred by finding it unreasonable to wait and amicably settle the
dispute in an effort to conserve scarce funds before legal intervention.
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Our review of a petition to open is governed by the following standards:
A petition to open a default judgment is addressed to the
equitable powers of the court and the trial court has discretion to
grant or deny such a petition. […] The court's refusal
to open a default judgment will not be reversed on appeal unless
the trial court abused its discretion or committed an error of law.
An abuse of discretion is not merely an error in judgment; rather
it occurs when the law is overridden or misapplied, or when the
judgment exercised is manifestly unreasonable or the result of
partiality, prejudice, bias or ill-will. Moreover, this Court must
determine whether there are equitable considerations that weigh
in favor of opening the default judgment and allowing the
defendant to defend the case on the merits. Where the equities
warrant opening a default judgment, this Court will not hesitate
to find an abuse of discretion.
Stabley v. Great Atlantic & Pacific Tea Co., 89 A.3d 715, 719 (Pa. Super.
2014) (internal citations and brackets omitted).
“The party seeking to open the default judgment must establish three
elements: (1) the petition to open [] was promptly filed; (2) the default can
be reasonably explained or excused; and (3) there is a meritorious defense to
the underlying claim.” Id. (citation omitted). “[W]here some showing has
been made with regard to each part of the [above-mentioned three-part] test,
a court should not blinder itself and examine each part as though it were a
water-tight compartment, to be evaluated in isolation from other aspects of
the case.” Id. at 722 (citation omitted). “Instead, the court should consider
each part in the light of all the circumstances and equities of the case. Only in
that way can a chancellor act as a court of conscience.” Id. (citation omitted).
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The trial court determined that CCCF failed to provide a reasonable
excuse for failing to respond to Loncar’s complaint and subsequent request for
default judgment:
In light of [Loncar’s] October 5, 2016 letters, CCCF was on notice
that [Loncar] intended to file a suit against [it]. CCCF failed to
respond to those letters and there is no evidence that CCCF sought
to resolve the issue amicably before [Loncar] filed the December
13, 2016 [c]omplaint. CCCF had several months to prepare and
defend [itself] and ample time to reach out to [Loncar’s] counsel.
CCCF’s board [members] may have believed it was in their best
interest to sit back and allow [a non-attorney, board member] to
explore the issue, but ultimately [he] was unable to resolve the
issue and informed CCCF, before the 20 days to respond expired,
that [it] needed to retain counsel.
CCCF knew or should have known this matter was incapable of
being resolved outside of court based upon the [] hostile
relationship that existed between the parties, that CCCF had
plenty of time to prepare to retain counsel, and that CCCF was
aware of the necessity to hire counsel well before [it] took steps
to do so. CCCF’s preference to resolve issues outside of court due
to [its] status as a religious non-profit corporation that is funded
by its members, does not provide a reasonable excuse or
explanation for CCCF’s failure to file a responsive pleading.
[The trial court did] not find that CCCF [was] an unsophisticated
party. CCCF is a corporation. Although it is a non-profit, religious
corporation, it is not an unsophisticated layperson. A party’s non-
profit status or religious purpose does not imply that it is an
unsophisticated party.
Although CCCF is comprised of laypersons, CCCF has engaged in
legal matters prior to the case at hand. CCCF filed suit against
[Loncar] at the Magisterial District Court level. Although the case
was dismissed, CCCF took it upon itself to file suit against
[Loncar]. Additionally, CCCF has engaged in a series of relatively
complex real estate transactions including the purchasing and
deeding of property, and either drafted or hired counsel to draft a
contractual agreement between [Loncar] and CCCF. Regardless
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of the enforceability of the agreement, CCCF has consistently
attem[p]ted to act as a sophisticated party in the legal system.
* * *
[…] CCCF sat back and knowingly allowed default judgment to be
entered against the corporation and did not take any meaningful
steps to retain counsel or address the issue until the eve of
default. CCCF’s failure to file a responsive pleading, within the
legal time period, had nothing to do with the corporation’s level of
sophistication. Furthermore, once CCCF obtained counsel,
twenty-four days passed from the date of entry of judgment
before CCCF’s response was filed.
* * *
Nothing in the record would support a finding that CCCF provided
a reasonable excuse or explanation for its failure to file a
responsive pleading to [Loncar’s c]omplaint.
Id. at 6-8.
Upon review of the record and applicable law, we agree with the trial
court that CCCF failed to provide a reasonable explanation for the entry of
default judgment against it. CCCF did not argue that it had difficulty retaining
counsel. Instead, it complained that it did not want to expend funds on its
defense. In light of the fact that it knew litigation was pending and that it
ultimately recognized the belated need to retain counsel, CCCF has not shown
its actions in allowing default judgment to be entered against it were
reasonable under the second prong of the aforementioned test. As such, we
discern no abuse of discretion or error of law in refusing to open the default
judgment entered against CCCF. Hence, we affirm the trial court’s
determination.
Order affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/30/2018
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